Amendment in the Customs Rules, 2001 [EFS Rules, 2021]

GOVERNMENT OF PAKISTAN REVENUE DIVISION FEDERAL BOARD OF REVENUE Islamabad, the oJ tl March, 2025 NOTIFICATION powers conferred by section 219 of the Customs s.n.O.lo/ 0)12025.- In exercise of the Act, 1969 (IV of 1969), section 50 olthe Sales Ta-x Act, 1990, section 40 of the Federal Excise Act. 2005 and section 237 ofthe Income Tax Ordinance. 2001 (XLX ol200l), the Federal Board of Revenue is pleased to direct that the following further amendments shall be made in the Customs Rules. 2001, the same having been previously published vide Notification No. S.R.O 204(Di2025, dated 25th February, 2025. as required by sub-section (3A) of section 2 l9 ofthe Customs Act. I 969 (IV of 1969), namely:- In the aforesaid Rules, in Chapter XL. - (l in rule 871. ) (i) in clause (a), the expression "or as approved by Engineering Development Board (EDB)" shall after six months from commencement of this Notification be omitted: the expression "or as approved by the EDB" shall after six (ii) in clause O, months from commencement of this Notification be omitted; (iii) in clause (m), after the words "for acquisition", the words "except iron and steel scrap lalling under the respective headings of Pakistan Customs Tariff '. shall be inserted; (iv) clause (n) shall be omitted; and (v) for'clause (u), the following shall be substituted. namely:- $ "(u) "regulatory authority" means Collector of Customs, in whose the, jurisdiction the place of business or manufacturing unit of applicant, duly registered under the Sales Tax Act, 1990, is located. ln case an applicant has multiple manufacturing facilities in different jurisdictions, the Collector in whose jurisdiction, the head office of the applicant or principal manufacturing unit is located shall be the regulatory authority.": (2) in rule 872, in sub-rule (l). after the words "following persons", the expression ", except persons engaged in import of iron and steel scrap falling under the respective headings ofPakistan Customs Tariff," shatl be inserted. (3) in rule 874, 1,

(i) in sub-rule (4), for the expression "perthe claimed percentage ofproduction to be exported i.e.. Category A or B, which shall be subject to review by the Regulatory Collector after one year" the expression "in Category 82" shall be substituted; (ii) fbr sub-rule (5) and the table. the following shall be substituted. namely: - "(5) Al applicant showing a poor compliance profile, i.e., having one or more contravention cases adjudged against him or having pending recovery cases or pending criminal proceedings, the authorization granted shall on providing opportunity of defence be suspended immediately and the Regulatory Collector may initiate proceedings for cancellation of the authorization besides other legal action.": and (iii) sub-rule (6) shall be omitted; (4) in rule 875, in sub-rule (2), after clause (viii), the following new clause shall be inserted, namely:- "(viiia) the list ofvendors in accordance with the requirements laid down in rule 882;"; (5) in rule 876. in sub-rule (1). - (0 for clause (a). the follouing shall be substituted, namely:- "(a) Category A: (i) indemnity bond as set out in Appendix-lll and PDC for $ manufacturers-cum-exporters having minimum export value /-z' of USD 20 million or above in last two years; (i i) manul'acturers-cum-exporters having exports value less than USD 20 million in last two years, shall fumish indemnity bond as set out in Appendix-Ill and PDC equivalent to the average annual duty & taxes of input goods used in exports in last two years, and bank guarantee or revolving bank guarantee shall be lumished for any excess duty & taxes being defened or remitted:" (b) for clause (b), the following shall be substituted, namely:-

"(b) Category 81: For manufacturer-cum-exporters with a self- owned manufacturing flacility, indemnity bond as set out in Appendix- Ill and PDC equivalent to the average annual duty & taxes of input goods used in exports in last three years, and bank guarantee or revolving bank guarantee shall be fumished for any excess duty & taxes deferred or remitted; and lor manufacturer-cum-expofiers with a rented production facility, bank guarantee or revolving bank guarantee covering their annual requirement:", (c) in clause (c), for the words "Revolving Insurance", the word "Bank", shall be substituted and thereafter the expression "for manufacturers with self-owned manufacturing facility covering their annual requirement, Revolving Bank Guarantee for manufacturers with rented production facilit,v" shall be omiued; (d) for clause (d), the following shall be substituted, namely:- "(d) Category Cl: For manufacturers with a self-owned manufacturing facility. indemnity bond as set out in Appendix-lll and PDC equivalent to the average duty & taxes of input goods used in indirect exports in last three years and bank guarantee or revolving bank guarantee shall be fumished for any excess duty & taxes defened $' orandremitted.commercialand lorexporters.manufacturersbankwithguaranteea rentedorproductionrevolvingfacilitybankz) guarantee covering their annual requirement;"; and (e) in clause (e). for the words "Revolving Insurance", the word "Bank" shall be substituted and thereafter the expression "with a self-owned manufacturing tacility,' and Revolving Bank Guarantee for manufacturers with rented production facility" shall be omitted. (6) in rule 877.- (i) sub-rule (2) and (3) shall be omitted: (ii) for sub-rule (4), the following shall be substituted, namely:- "(4) Within seven days of the receipt of the application, the case shall be referred to relevant Collectorate oflnput Output Coefficient Organization (IOCO) for determination of production capacity and input output ratios within sixty days. The Collector IOCO shall ensure that the application is processed within 60 days ofthe date of receipt in IOCO:

Provided that in case the IOCO fails to process the case within sixty days, the user shall be allowed acquisition of 25o/o of the value of input goods involved as declared against a bank guarantee. The provisional permission shall be subject to modification once the IOCO finalizes its assessment of the production capacity and input output ratios and the same shall be uploaded in the WeBOC or PSW System by IOCO or Regulatory Collector."l (iii) for sub-rule (5), the following shall be substituted, namely:- "(5) In case the production capacity and input output ratios have already been determined by IOCO or EDB, as the case may be, the Regulatory Collector shall process the authorization on the basis ofalready determined production capacity and input output ratios."; (iv) fbr sub-rule (6). the lollowing shall be substituled, namely:- I "(6) The Chief Collector (Exports & IOCO) shall monitor all pending cases to ensure their timely processing within 60 days."; $' (v) in sub-rule (9). the words "including the Engineering Development Board" shall afler six months from commencement of this2 Notifi cation be omitted: (vi) in sub-rule (ll), the expression "as well as by EDB on sectoral basis" shall after six months from commencement of this Notification be omitted; (vii) sub-rules (13) and (14) shall be omitted; and (viii) after the sub-rule ( l4), omitted as aforesaid, the lollowing new- sub- rule shall be inse(ed, namely:- ''(15) No authorization under this rule shall be issued without determination ofproduction capacity and input output ratios by IOCO, except as provided in the proviso to sub-rule (4)."; (7) after rule 877. the following new Rule shall be inserted, namely:-

*877(A). Drawal of samples.- The customs computerized system may assign Goods Declarations filed under these rules for drawal of samples on computerized selectivity criteria: Provided that the Regulatory Collector or the Collector of Customs in whose jurisdiction the imports or exports are being made. may also authorize the drawal of samples by an officer not below the rank of Assistant Collector. (2) Three samples of imported input goods or output goods meant for export shall be drawn at the time of import or export, respectively, duly signed by concemed Assistant Collector or Deputy Collector and EFS authorization number and date shall be endorsed thereon. Out of the drawn samples. one will be handed over to the EFS user or his authorized agent, second will be retained by the drawing Collectorate and the third will be sent to the Regulatory Collectorate. The Assistant Collector or Deputy Collector incharge ofconcemed Customs station. shall inform the Regulatory Collector about the cases where any discrepancy is reported against the El'S user in accordance with law: Provided that the Regulatory Collector may also authorize an officer not below the rank of Assistant Collector to visit the premises ol the EFS user to draw samples, in addition to already drawn samples." (8) in rule 878.- (a) for sub-rule (3). the lollowing shall be substituted, namely:- "(3) The authorization of the value ofinput goods shall be uploaded for each year based on annual estimated requirement determined by IOCO./-) \>4 The uploading of the authorization lor the subsequent year shall be subject a--'' to satisfaction ol Regulatory Collector that no action under the Acts is pending against the user and the user has submitted all reconciliation statements as set out in Appendix-1V.": and (b) sub-rule (4) shall be omitted; (9) in rule 879. after sub-rule (4), the following new sub-rule shall be inserted, namely:- "(5) The Regulatory Collector, upon satisfaction that the input goods have been illegally removed from the premises or disposed-off or retained beyond the utilization period or failed to achieve the value addition in the utilization period as required under these rules. shall immediately proceed to encash the PDC or Bank Guarantee. as the case may be.";

( 10) in rule 880,- (i) in sub-rule (2), for the word "thirty", the word "seven" shall be substituted; (iD after sub-rule (3). the following new sub-rules shall be inserted, namely:- "(3A) 1'he Regulatory Collector may conduct the stock-taking of inputs through an officer not below the rank of Assistant Collector. at any time during the utilization period. (3B) The user shall ensure proper traceability of inputs through proper inventory records which shall be made available to the officer not below the rank of Assistant Collector undertaking stock-taking as specified in sub-rule (3A).": and (iii) in sub-rule (4), after the expression "information, audit", the expression " stock-taking". shall be inserted. and thereafter, after the words "been uploaded in time." the expression "or the input goods are not accounted for." shall be inserted.; (1 1) in rule 882, (i) lor sub-rule (2), the following shall be substituted, namely:- *(2) 'I'he user with past export performance may apply online to the Regulatory Collector, in the WeBOC or PSW system, as per the prescribed format as set out in Appendix-V, to remove input goods out of - his premises for partial manufacture or processing by a vendor duly declared at the time of fiting his application for grant of authorization, having in- house manufacturing facility to perform the stated manufacturing process at the premises of the vendor which are geo-tagged in the WeBOC registration database: Provided that the processing period by vendor shall not exceed sixty days from the date ofremoval ofgoods from the user premises."; and (iD after sub-rule (2). the following new sub-rules shall be inserted. namely:- premises "(3) All details related to the goods removed from the including quantity and description, particulars of the vendor. registration number of the vehicle and outward gate pass, shall be led into the system by the EFS user on the same day.

(4) The vendor shall not be changed or added except with prior permission of the Regulatory Collector concemed."; (12) for rule 883, the following shalI be substituted, namely:- "883. Utilization period.- The input goods acquired under these rules shall be utilized within 9 months extendable in exceptional circumstances by a committee to be constituted by the Board."; (13) Inrule 884, for the first and second proviso, the following shall bs substituted, namely:- "Provided that for supplies against intemational tenders or to exempt projects or sectors in Pakistan, the user shall be required to file a declaration in WeBOC system"; (14) In rule 885, in sub-rule (2A), for the words "revolving insurance", the word "Bank". shall bs substituted; (15) in rule 886. (i) in sub-rule (3), after the words "B grade goods", the expression "not more than 5% of the total production" shall be inserted and for full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:- "Provided that in case of l'actory rejects or B grade are more thanr) 5% ofthe total production. the Goods Declaration shall be assessed as if the goods are imported into Pakistan in standard condition."t and (ii) in sub-rule (4). after the words "sales tax", the expression ", or any other leviable duty and taxes" shall be inserted; ( 16) in rule 887, (i) in sub-rule (1), clause (a) shall be omitted; and (ii) sub-Rule (4) shall be omitted; (17) in rule 892. sub-rule (3) shall be omitted: and (18) in rule 893. in sub-rule (1).- a) for the words "as under", the expression "on annual basis for all categories:- shall be substituted'

(b). (c) and (d) shall be omitted, and b) clauses (a). c) for the second proviso, the following shall be substituted, namely:- "Provided further that the system may assign the audit to the regulatory Collector instead of the Directorate ofPost Clearance Audit." IF.No.5(7)EP/20 I 9-Pt] afiq Secretary licy)